ESG Book’s Post

In mid-October, the Task Force on Climate-related Financial Disclosures (TCFD) published its sixth and final TCFD Status Report detailing TCFD adoption and disclosure trends across over 3,100 companies in 8 economic sectors. Read this post by KERAMIDA's Lauren Besser, MBA, for the report’s key findings and a detailed comparison of TCFD recommendations vs. SEC proposed requirements. #tcfd #climatechange #climateaction #emissionsreduction #emissionsreporting #carbonfootprint #sustainability #environment

Single or Double: Exploring Materiality in Different ESG Disclosures! The landscape of #sustainabilityreporting is evolving when it comes to materiality assessment. Frameworks like #GRI and the forthcoming #CSRD promote #doublemateriality, urging companies to disclose how #environmental, #social, and #governance (#ESG) factors impact their finances (financial materiality) and vice versa (#impact #materiality). In contrast, #SASB, #TCFD, and the #SEC prioritize financially material ESG factors, with TCFD and SEC regulations geared specifically towards climate-related financial risks and opportunities. #CDP occupies a distinct space with its #singlemateriality focus on environmental impact, requesting data on a company's performance and #strategy in areas like #climatechange, water security, and forests. #ESG #ESGReporting #ESGMateriality #MaterialityAssessment

Great insights into how various ESG frameworks play a key role in materiality assessents. #ESG #ESGMateriality

Let’s reframe… ❎ GRI prescribes negative #impact materiality since its major revision in 2021 ❎ SASB Standards no longer exist separately, they are part of IFRS Foundation and tucked under IFRS SDS, which do not define material issues, but material information - key deciding factor is if users want to know (so if they want to know about impact…) ❎ TCFD no longer exists, but when it did it prescribed a double materiality approach (the reduction of corporate emissions to solve for climate change is the definition of impact) ❎ CDP is neither a standard, framework, nor regulation, it’s a platform that declares to reflect all the major standards, including IFRS SDS, TCFD, GRI, ESRS, and TNFD, so has to be double materiality focused

Materiality - what does it mean? Different frameworks provide different definitions, as summarised by Climate, below. The one definition that is missing from the summary is from the IFRS Foundation who also adopt a #financialmateriality perspective. To IFRS, information is material if "omitting, misstating or obscuring that information" could influence decisions made by investors, lenders and creditors.

The “Materiality Jungle” refers to the complex landscape of sustainability and ESG (Environmental, Social, and Governance) reporting frameworks. Here’s a breakdown of key entities and their roles: 1. Sustainability Accounting Standards Board (SASB): Focuses on financial materiality, providing industry-specific standards for disclosing sustainability information to investors. 2. Global Reporting Initiative (GRI): Emphasises broader materiality, covering economic, environmental, and social impacts for various stakeholders. 3. Task Force on Climate-related Financial Disclosures (TCFD): Recommends climate-related financial disclosures, highlighting how climate change affects financial stability. 4. CDP (formerly Carbon Disclosure Project): Manages global environmental impact disclosures on climate change, water security, and deforestation. 5. Corporate Sustainability Reporting Directive (CSRD): EU directive requiring large companies to disclose detailed sustainability information, aiming for accountability and transparency. 6. US Securities and Exchange Commission (SEC): Proposes rules for public companies to disclose climate-related risks, reflecting a push towards standardised ESG reporting. Key Differences and Convergence Trends • Materiality Focus: SASB and TCFD target financial materiality; GRI and CDP consider broader stakeholder impacts. • Scope and Framework: GRI offers comprehensive sustainability guidelines, while SASB and TCFD focus on industry-specific and climate-related standards, respectively. • Regulatory Influence: CSRD mandates detailed sustainability disclosures in Europe, while SEC initiatives aim to standardise climate-related disclosures in the US. Convergence Efforts to harmonise these frameworks include: • Value Reporting Foundation: Merging SASB and IIRC to streamline corporate reporting. • IFRS Foundation: Creating the International Sustainability Standards Board (ISSB) to develop global sustainability disclosure standards, aligning SASB, TCFD, and others. Conclusion The “Materiality Jungle” highlights the evolving and overlapping sustainability reporting standards. While differing in focus and scope, convergence trends aim to simplify and standardise disclosures, enhancing transparency and comparability for stakeholders. Understanding each framework’s role and their convergence is key to navigating sustainability reporting.

Materiality assessment significantly impacts sustainability reporting by identifying and prioritizing environmental, social, and governance (ESG) issues that are most relevant to an organization's business and stakeholders. This process helps companies focus their reporting on areas of greatest impact and interest, ensuring transparency and informing strategic decision-making towards sustainability goals.

one of the key issues to solve for in emerging markets as sustainable finance practitioners push for voluntary and mandatory disclosure obligations of the counterparts in our portfolios. which will be more practical for the most important objectives we seek and for consistency....single or double materiality frameworks?

GRESB is based on double materiality, including the new "dynamic materiality" framework for infrastructure development. Learn more from Joss Blamire and Cathy Granneman https://lnkd.in/eyYcxR2Q

An well-put comparison of materiality types across various sustainability standards. Quick and easy to remember!